Data table Cause-and-Effect Relationship Between Allocation Base and Activity Cost 1 Standard Job Special Job Total 1.600 800 $ 1,000 $ 1,400 2 Number of printing jobs 3 Price per job 4 Cost of supplies per job 5 Direct labor costs per job 6 Printing machine-hours per job $ 120$ 240 $ 1201$ 230 10 10 $ 552,000 Indirect costs of operating printing machines increase with printing machine-hours 5 8 7 Cost of printing machine operations 8 Setup-hours per job 9 Setup costs 10 Total number of purchase orders $ 374,400 Indirect setup costs increase with setup-hours 320 420 11 Purchase order costs $ Indirect purchase order costs increase with 22,940 number purchase orders Design costs are allocated to standard and special jobs based on a special study of the 38,000 design department 12 Design costs $ 13,000 S 25,000 $ 13 Marketing costs as a percentage of revenues 5% 5%$ 136.0001 Print Done - X Data table 2 Number or printing jobs TOUUT 800 3 Price per job $ 1,000 $ 1,400 $ 120$ 240 4 Cost of supplies per job 5 Direct labor costs per job 6 Printing machine-hours per job $ 120$ 230 10 10 Indirect costs of operating printing machines increase with printing machine-hours $ 552,000 5 8 7 Cost of printing machine operations 8 Setup-hours per job 9 Setup costs 10 Total number of purchase orders $ 374,400 Indirect setup costs increase with setup-hours 320 420 11 Purchase order costs $ Indirect purchase order costs increase with 22,940 number of purchase orders Design costs are allocated to standard and special jobs based on a special study of the 38,000 design department $ 13,000 $ 25.000$ 12 Design costs 13 Marketing costs as a percentage of revenues 5% 5% $ 136,000 Demand for administrative resources increases 169,200 with direct labor costs 14 Administration costs $ Print Done Fulltone Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Fulltone classifies its various printing jobs as standard jobs or special jobs. i (Click the icon to view additional information.) To see how activity-based costing would affect the costs of standard and special jobs, Fulltone collects the following information for the fiscal year 2017 that just ended. (Click the icon to view the information.) Read the requirements. - More info m. (Round interim calcula Requirements Fulltone's simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Fulltone operates at capacity and allocates all indirect costs using printing machine-hours as the allocation base. Fulltone is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Fulltone's ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirect-cost pool there would now be six categories for assigning indirect costs: design, purchasing, setup, printing machine operations, marketing, and administration. 1. Calculate the cost of a standard job and a special job under the simple costing system. 2. Calculate the cost of a standard job and a special job under the activity-based costing system. 3. Compare the costs of a standard job and a special job in requirements 1 and 2. Why do the simple and activity-based costing systems differ in the cost of a standard job and a special job? 4. How might Fulltone use the new cost information from its activity-based costing system to better manage its business? Print Done Print Done 3. Fulltone Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Fulltone classifies its various printing jobs as standard jobs or special jobs. (Click the icon to view additional information.) To see how activity-based costing would affect the costs of standard and special jobs, Fulltone collects the following inf Print for the fiscal year 2017 that just ended. 2(Click the icon to view the information.) Read the requirements Requirement 1. Calculate the cost of a standard job and a special job under the simple costing system. (Round interim calculations to three decimal places, X.XXX and your final answers to the nearest cent, X.XX.) Standard Special Simple Costing System Job Job Cost of supplies per job Direct manufacturing labor cost per job Indirect cost allocated to each job Total costs Requirement 2. Calculate the cost of a standard job and a special job under the activity-based costing system. Begin by calculating the allocation rates for the following activities. (Abbreviations used: $ = Dollar, DM = Direct manufacturing, Qty. = Quantity. Round the allocation rates to the nearest cent for all activities except Administration; round Administration to five decimal places, X.XXXXX.) (1) (2) ABC Allocation rate Machine operations (3) Setups - (4) Purchase orders (5) Administration (6) Now, completing the table for total costs of standard jobs, special jobs and then cost per job for each type of job. (Round your answers to the nearest whole dollar except cost per job. Round cost per job to the nearest cent.) Standard Special ABC Costing System Job Job Cost of supplies Direct manufacturing labor costs Indirect costs allocated: Machine operations Setups Purchase orders Design 5. Greener Lawn USA provides lawn care and landscaping services to commercial clients. Greener Lawn USA uses activity-based costing to bid on jobs and to evaluate their profitability. Greener Lawn USA reports the following budgeted annual costs: (Click the icon to view budgeted annual costs.) 2(Click the icon to view additional information.) Read the requirements Requirement 1. Allocate Greener Lawn USA's costs to the activity-cost pools and determine the activity rate for each pool. Start by allocating Greener Lawn USA's costs to the activity-cost pools. (Enter zero in any cell if no amount should be allocated to the activity-cost pool.) Lawn Estimating jobs Landscape design care Other Total Wages and salaries Depreciation Supplies Other overhead Total Now select the formula used to determine the cost driver rates, then calculate the activity rate for each pool. (Abbreviation used: DLH = Direct labor-hour. Round the answers to the nearest cent, "X.XX".) (1) (2) Cost driver rate = Estimating jobs = (3) Lawn care = (4) Landscape design (5) Requirement 2. Estimate total cost for the Shasta Office Park job. How much would Greener Lawn USA bid to perform the job? Calculate the total costs and bid amount Greener Lawn USA would charge Shasta Office Park. (Round the answers to the nearest cent, "X.XX".) Estimating jobs Lawn care Landscape design Total costs Markup multiplier Bid estimate 2: Data Table Print B D Cause-and-Effect Relationship Between Allocation Base and Activity Cost 1 Standard Job Special Job Total 2 Number of printing jobs 1,600 800 3 Price per job $ 1,000 $ 1,400 4 Cost of supplies per job $ 120 $ 2401 5 Direct labor costs per job $ 120 $ 230 6 Printing machine-hours per job 10 10 Indirect costs of operating printing machines increase 552,000 with printing machine-hours S 5 8 7 Cost of printing machine operations 8 Setup-hours per job 9 Setup costs 10 Total number of purchase orders $ 374,400 Indirect setup costs increase with setup-hours 320 420 11 Purchase order costs $ Indirect purchase order costs increase with number of 22,940 purchase orders Design costs are allocated to standard and special jobs based on a special study of the design 38,000 department 12 Design costs 13,000 $ 25,000 $ 13 Marketing costs as a percentage of revenues 5% 5% $ 136,000 Demand for administrative resources increases with 169,200 direct labor costs 14 Administration costs $ 3: Requirements 1. 2. Calculate the cost of a standard job and a special job under the simple costing system. Calculate the cost of a standard job and a special job under the activity-based costing system. Compare the costs of a standard job and a special job in requirements 1 and 2. Why do the simple and activity-based costing systems differ in the cost of a standard job and a special job? How might Fulltone use the new cost information from its activity-based costing system to better manage its business? 3. 4. (3) (1) O O # of printing jobs O Cost of supplies per job O Design costs O Price per job Total cost of activity Total # of purchase orders Total qty consumed (2) O O # of printing jobs O Cost of supplies per job O Design costs O Price per job Total cost of activity Total # of purchase orders Total qty consumed O per $ of DM labor cost O per $ of sales O per inspection O per machine-hour O per purchase order O per setup-hour $ 120$ 240 Print 4 Cost of supplies per job 5 Direct labor costs per job 6 Printing machine-hours per job $ 120$ 230 10 10 Indirect costs of operating printing machines increase 552,000 with printing machine-hours 7 Cost of printing machine operations $ 5 8 8 Setup-hours per job 9 Setup costs 10 Total number of purchase orders S 374,400 Indirect setup costs increase with setup-hours 320 420 11 Purchase order costs $ Indirect purchase order costs increase with number of 22,940 purchase orders Design costs are allocated to standard and special jobs based on a special study of the design 38,000 department $ 13,000 $ 25,000 $ 12 Design costs 13 Marketing costs as a percentage of revenues 5% 5% $ 136,000 Demand for administrative resources increases with direct labor costs 14 Administration costs $ 169,200 3: Requirements 1. 2. Calculate the cost of a standard job and a special job under the simple costing system Calculate the cost of a standard job and a special job under the activity-based costing system. Compare the costs of a standard job and a special job in requirements 1 and 2. Why do the simple and activity-based costing systems differ in the cost of a standard job and a special job? How might Fulltone use the new cost information from its activity-based costing system to better manage its business? 3. 4. (2) (3) (1) O O# of printing jobs O Cost of supplies per job O Design costs O Price per job Total cost of activity Total # of purchase orders Total qty consumed O# of printing jobs O Cost of supplies per job O Design costs O Price per job Total cost of activity Total # of purchase orders Total qty consumed O per $ of DM labor cost O per $ of sales O per inspection O per machine-hour O per purchase order O per setup-hour (7) O less O per machine-hour O per purchase order O per setup-hour (4) O O per $ of DM labor cost O per $ of sales O per inspection O per machine-hour O per purchase order O per setup-hour (8) O less O more (9) O overcosts O undercosts (5) O O per $ of DM labor cost O per $ of sales O per inspection O per machine-hour O per purchase order O per setup-hour more (6) O O per $ of DM labor cost O per $ of sales O per inspection (10) O overcosts O undercosts Data table Cause-and-Effect Relationship Between Allocation Base and Activity Cost 1 Standard Job Special Job Total 1.600 800 $ 1,000 $ 1,400 2 Number of printing jobs 3 Price per job 4 Cost of supplies per job 5 Direct labor costs per job 6 Printing machine-hours per job $ 120$ 240 $ 1201$ 230 10 10 $ 552,000 Indirect costs of operating printing machines increase with printing machine-hours 5 8 7 Cost of printing machine operations 8 Setup-hours per job 9 Setup costs 10 Total number of purchase orders $ 374,400 Indirect setup costs increase with setup-hours 320 420 11 Purchase order costs $ Indirect purchase order costs increase with 22,940 number purchase orders Design costs are allocated to standard and special jobs based on a special study of the 38,000 design department 12 Design costs $ 13,000 S 25,000 $ 13 Marketing costs as a percentage of revenues 5% 5%$ 136.0001 Print Done - X Data table 2 Number or printing jobs TOUUT 800 3 Price per job $ 1,000 $ 1,400 $ 120$ 240 4 Cost of supplies per job 5 Direct labor costs per job 6 Printing machine-hours per job $ 120$ 230 10 10 Indirect costs of operating printing machines increase with printing machine-hours $ 552,000 5 8 7 Cost of printing machine operations 8 Setup-hours per job 9 Setup costs 10 Total number of purchase orders $ 374,400 Indirect setup costs increase with setup-hours 320 420 11 Purchase order costs $ Indirect purchase order costs increase with 22,940 number of purchase orders Design costs are allocated to standard and special jobs based on a special study of the 38,000 design department $ 13,000 $ 25.000$ 12 Design costs 13 Marketing costs as a percentage of revenues 5% 5% $ 136,000 Demand for administrative resources increases 169,200 with direct labor costs 14 Administration costs $ Print Done Fulltone Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Fulltone classifies its various printing jobs as standard jobs or special jobs. i (Click the icon to view additional information.) To see how activity-based costing would affect the costs of standard and special jobs, Fulltone collects the following information for the fiscal year 2017 that just ended. (Click the icon to view the information.) Read the requirements. - More info m. (Round interim calcula Requirements Fulltone's simple job-costing system has two direct-cost categories (direct materials and direct labor) and a single indirect-cost pool. Fulltone operates at capacity and allocates all indirect costs using printing machine-hours as the allocation base. Fulltone is concerned about the accuracy of the costs assigned to standard and special jobs and therefore is planning to implement an activity-based costing system. Fulltone's ABC system would have the same direct-cost categories as its simple costing system. However, instead of a single indirect-cost pool there would now be six categories for assigning indirect costs: design, purchasing, setup, printing machine operations, marketing, and administration. 1. Calculate the cost of a standard job and a special job under the simple costing system. 2. Calculate the cost of a standard job and a special job under the activity-based costing system. 3. Compare the costs of a standard job and a special job in requirements 1 and 2. Why do the simple and activity-based costing systems differ in the cost of a standard job and a special job? 4. How might Fulltone use the new cost information from its activity-based costing system to better manage its business? Print Done Print Done 3. Fulltone Corporation owns a small printing press that prints leaflets, brochures, and advertising materials. Fulltone classifies its various printing jobs as standard jobs or special jobs. (Click the icon to view additional information.) To see how activity-based costing would affect the costs of standard and special jobs, Fulltone collects the following inf Print for the fiscal year 2017 that just ended. 2(Click the icon to view the information.) Read the requirements Requirement 1. Calculate the cost of a standard job and a special job under the simple costing system. (Round interim calculations to three decimal places, X.XXX and your final answers to the nearest cent, X.XX.) Standard Special Simple Costing System Job Job Cost of supplies per job Direct manufacturing labor cost per job Indirect cost allocated to each job Total costs Requirement 2. Calculate the cost of a standard job and a special job under the activity-based costing system. Begin by calculating the allocation rates for the following activities. (Abbreviations used: $ = Dollar, DM = Direct manufacturing, Qty. = Quantity. Round the allocation rates to the nearest cent for all activities except Administration; round Administration to five decimal places, X.XXXXX.) (1) (2) ABC Allocation rate Machine operations (3) Setups - (4) Purchase orders (5) Administration (6) Now, completing the table for total costs of standard jobs, special jobs and then cost per job for each type of job. (Round your answers to the nearest whole dollar except cost per job. Round cost per job to the nearest cent.) Standard Special ABC Costing System Job Job Cost of supplies Direct manufacturing labor costs Indirect costs allocated: Machine operations Setups Purchase orders Design 5. Greener Lawn USA provides lawn care and landscaping services to commercial clients. Greener Lawn USA uses activity-based costing to bid on jobs and to evaluate their profitability. Greener Lawn USA reports the following budgeted annual costs: (Click the icon to view budgeted annual costs.) 2(Click the icon to view additional information.) Read the requirements Requirement 1. Allocate Greener Lawn USA's costs to the activity-cost pools and determine the activity rate for each pool. Start by allocating Greener Lawn USA's costs to the activity-cost pools. (Enter zero in any cell if no amount should be allocated to the activity-cost pool.) Lawn Estimating jobs Landscape design care Other Total Wages and salaries Depreciation Supplies Other overhead Total Now select the formula used to determine the cost driver rates, then calculate the activity rate for each pool. (Abbreviation used: DLH = Direct labor-hour. Round the answers to the nearest cent, "X.XX".) (1) (2) Cost driver rate = Estimating jobs = (3) Lawn care = (4) Landscape design (5) Requirement 2. Estimate total cost for the Shasta Office Park job. How much would Greener Lawn USA bid to perform the job? Calculate the total costs and bid amount Greener Lawn USA would charge Shasta Office Park. (Round the answers to the nearest cent, "X.XX".) Estimating jobs Lawn care Landscape design Total costs Markup multiplier Bid estimate 2: Data Table Print B D Cause-and-Effect Relationship Between Allocation Base and Activity Cost 1 Standard Job Special Job Total 2 Number of printing jobs 1,600 800 3 Price per job $ 1,000 $ 1,400 4 Cost of supplies per job $ 120 $ 2401 5 Direct labor costs per job $ 120 $ 230 6 Printing machine-hours per job 10 10 Indirect costs of operating printing machines increase 552,000 with printing machine-hours S 5 8 7 Cost of printing machine operations 8 Setup-hours per job 9 Setup costs 10 Total number of purchase orders $ 374,400 Indirect setup costs increase with setup-hours 320 420 11 Purchase order costs $ Indirect purchase order costs increase with number of 22,940 purchase orders Design costs are allocated to standard and special jobs based on a special study of the design 38,000 department 12 Design costs 13,000 $ 25,000 $ 13 Marketing costs as a percentage of revenues 5% 5% $ 136,000 Demand for administrative resources increases with 169,200 direct labor costs 14 Administration costs $ 3: Requirements 1. 2. Calculate the cost of a standard job and a special job under the simple costing system. Calculate the cost of a standard job and a special job under the activity-based costing system. Compare the costs of a standard job and a special job in requirements 1 and 2. Why do the simple and activity-based costing systems differ in the cost of a standard job and a special job? How might Fulltone use the new cost information from its activity-based costing system to better manage its business? 3. 4. (3) (1) O O # of printing jobs O Cost of supplies per job O Design costs O Price per job Total cost of activity Total # of purchase orders Total qty consumed (2) O O # of printing jobs O Cost of supplies per job O Design costs O Price per job Total cost of activity Total # of purchase orders Total qty consumed O per $ of DM labor cost O per $ of sales O per inspection O per machine-hour O per purchase order O per setup-hour $ 120$ 240 Print 4 Cost of supplies per job 5 Direct labor costs per job 6 Printing machine-hours per job $ 120$ 230 10 10 Indirect costs of operating printing machines increase 552,000 with printing machine-hours 7 Cost of printing machine operations $ 5 8 8 Setup-hours per job 9 Setup costs 10 Total number of purchase orders S 374,400 Indirect setup costs increase with setup-hours 320 420 11 Purchase order costs $ Indirect purchase order costs increase with number of 22,940 purchase orders Design costs are allocated to standard and special jobs based on a special study of the design 38,000 department $ 13,000 $ 25,000 $ 12 Design costs 13 Marketing costs as a percentage of revenues 5% 5% $ 136,000 Demand for administrative resources increases with direct labor costs 14 Administration costs $ 169,200 3: Requirements 1. 2. Calculate the cost of a standard job and a special job under the simple costing system Calculate the cost of a standard job and a special job under the activity-based costing system. Compare the costs of a standard job and a special job in requirements 1 and 2. Why do the simple and activity-based costing systems differ in the cost of a standard job and a special job? How might Fulltone use the new cost information from its activity-based costing system to better manage its business? 3. 4. (2) (3) (1) O O# of printing jobs O Cost of supplies per job O Design costs O Price per job Total cost of activity Total # of purchase orders Total qty consumed O# of printing jobs O Cost of supplies per job O Design costs O Price per job Total cost of activity Total # of purchase orders Total qty consumed O per $ of DM labor cost O per $ of sales O per inspection O per machine-hour O per purchase order O per setup-hour (7) O less O per machine-hour O per purchase order O per setup-hour (4) O O per $ of DM labor cost O per $ of sales O per inspection O per machine-hour O per purchase order O per setup-hour (8) O less O more (9) O overcosts O undercosts (5) O O per $ of DM labor cost O per $ of sales O per inspection O per machine-hour O per purchase order O per setup-hour more (6) O O per $ of DM labor cost O per $ of sales O per inspection (10) O overcosts O undercosts
